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AI, Automation, and Taxation

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Abstract

This chapter examines the implications of Artificial Intelligence (AI) and automation for the taxation of labor and capital in advanced economies. It synthesizes empirical evidence on worker displacement, productivity, and income inequality, as well as theoretical frameworks for optimal taxation. Implications for tax policy are discussed, focusing on the level of capital taxes and the progressivity of labor taxes. While there may be a need to adjust the level of capital taxes and the structure of labor income taxation, there are potential drawbacks of overly progressive taxation and universal basic income schemes that could undermine work incentives, economic growth, and long-term household welfare.

Suggested Citation

  • Bastani, Spencer & Waldenström, Daniel, 2024. "AI, Automation, and Taxation," Working Paper Series 1501, Research Institute of Industrial Economics.
    • Handle: RePEc:hhs:iuiwop:1501
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    More about this item

    Keywords

    AI; Automation; Inequality; Labor Share; Optimal Taxation; Tax Progressivity;
    All these keywords.

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation

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